An increasing number of businesses are switching to chip cards, but at a slower pace.
That’s according to the U.S. Payments Forum’s fall 2016 market snapshot. The report has found approximately a third of U.S. merchants now accept chip-based credit and debit cards.
The U.S. Payments Forum, earlier called the EMV Migration Forum, comprises banks, merchants and technology companies.
Chip Cards Improve Payment Security
Chip cards are designed to make transactions safer. They are equipped with microprocessor chips that makes it difficult for hackers to steal account information.
Every time a chip card is used for payment, it creates a unique one-time transaction code. So even if hackers get hold of the code, they cannot use it because it doesn’t work a second time.
Payment security benefits are driving more consumers towards these new cards. Notably, about three quarters of American consumers have at least one chip card in their wallet.
Why the Slow Progress on Chip Cards Acceptance?
Although many U.S. retailers are accepting chip-based cards today, the numbers are not growing as fast as expected.
The credit card industry is to blame, say experts. Some retailers can’t turn on their terminals to accept chip cards because they aren’t certified by the credit card industry.
“The merchants are definitely behind where we projected they would be at this time, but we recognize that they’ve had some unexpected complexities due to the unique requirements in the U.S. that didn’t exist in other markets,” Randy Vanderhoof, director of the U.S. Payments Forum, told NBC News.
But retailers that have upgraded to the terminals are seeing the results already.
According to Visa, retailers who are accepting chip cards saw a 47 percent decline in counterfeit card fraud in May 2016 compared to May 2015.
Chip Card Photo via Shutterstock